Ten Years of Business Lessons From a Startup Founder
Ten years is a long time, but actually not very long at all.
I started my first business when I was 16. I had no idea what I was doing. I barely knew that I was starting a business if I’m honest.
That was almost 20 years ago and since then, I have continued to build businesses. Over the past decade, I have taken my entrepreneurial journey very personally and dedicated my life to building businesses.
I spend most of my time thinking about businesses, building them, engaging with people who build business and think about them. I am entrenched in the world of building things and I absolutely love what I do. But it’s fucking hard. It’s meant to be hard. There are real, brutal lessons to learn at every turn.
I have failed more than I’d care to remember but the past decade has been an incredible ride. I have learned many things but below are some of the most important business lessons that I have learned.
Raising money is not hard
I have spent so many coffee meetings talking to entrepreneurs who believe the world doesn’t understand them and their amazing idea or business. I’ve heard about fundraising difficulties in every format, industry, vertical and market. I mostly hear about fundraising difficulties from founders who should be struggling to raise money because money isn’t free.
“VCs are idiots.”
“Money is dumb.”
“I have to move countries to raise funding.”
“My startup is worth more than this offer.”
These are typical statements from startup founders.
Here’s the hard-hitting truth: If you can’t raise money, it’s probably your fault, not the investor’s.
Reasons that you’re struggling may include:
You have no traction.
You have no revenue.
You have no track record as a founder (this is a tough one).
You are lacking a good network to provide warm introductions to investors.
Your idea is bad.
Your execution of the idea is bad.
Your market is too small.
Money is not hard to raise. Good partners are hard to find. The right partners are hard to find. But raising money, any kind of money, is not hard.
Building a business is difficult. You do not deserve funding. Investors don’t owe you anything. You need to prove that your business is worth investing in and if you do that, money is not hard to raise.
As a parting note; my last few businesses have taught me that more than raising funding, founders should be improving sales. Selling is the best kind of funding. If you can’t sell your product and generate revenue then you shouldn't be able to go out and raise funding either.
Finding a partner is incredibly difficult
Often a business partner is someone you know already. Perhaps from childhood, school, university or a colleague. You fall into this relationship out of convenience, comfort, and safety. You likely did not specifically seek them out, interview them and then decide to build something together. You just knew them and that they were right for you at the time.
I have never met a business founder who doesn’t have a difficult, often gut-wrenching cofounder story to tell.
This relationship is often overlooked as one of the most important in your life. You will spend more time with this person than with anyone else. At a startup, you work very hard and for very long hours in high-pressure situations that can blow up at any time. You will engage with your cofounder more than your partner, kids, family or best friends. You better fucking like them! And if you don’t like them, you better respect the hell out of them because you are going to become them and they will become you.
It is with a heavy heart that I can confidently tell you that at least one of your business partnerships is going to get messy. It’s inevitable. There are precious few cofounder relationships that don’t end in someone losing out. History is littered with cofounders who are broke while their ex-partner cashes in.
Choose your next business partner very, very carefully.
With that said, building a business alone is more difficult than building one with someone else. So take your time and get to know people before you jump into a startup with them.
Perseverance and resilience are everything
Here’s something that very few bright-eyed, aspiring startup founders understand or believe: You are going to fail.
You’re going to fail every day and at every turn. Most of your failures will be manageable and small so you’ll be able to withstand them. Building a business is going to be difficult. Long periods of consistent fun are hard to find when you’re building something new on the cutting edge.
There will be months and maybe even years where at the end of the period you’ll feel like it was mostly good. And that’s amazing. There may even be periods where you thrive on the excitement and things feel amazing. I am sure that in those periods you will just have adjusted to the hardships of startup life.
The key skill that I realized I needed to refine was perseverance. You can’t be a “one and done” kind of person to be a successful entrepreneur.
You have to an “onto the next one” kind of person. You hit a wall, bash through it, climb over it or walk around before you figure out that there actually was no wall to begin with and then you hit the next wall and do it all over again.
The key is to do it all over again. DO. FAIL. LEARN. REPEAT. This is my business mantra. As Dory would say: “Just keep swimming”.
I also realized that people love to say “no” to startup founders doing crazy and new things. You’re going to hear the word “no” more at a startup than you ever thought possible. When I was building a mobile internet startup almost ten years ago, I went out to raise a second round of funding. I met with nearly 40 different investors in six different countries and guess what? They all said no. Every single one. But I pushed on continued to build.
If a single “no” can knock you off your feet and send you spinning then you’re in trouble. If it’s important, it’s meant to be difficult. If it was easy, everyone would be doing it.
Luck and timing are real variables
When I was at university I built a social network for students in digs. It launched shortly after Facebook launched. It was an unabridged failure. There are many variables at play when something succeeds or fails but two that are undeniable are timing and luck.
You don’t really have control over either of them but you can use both to your advantage if you are experienced and aware of the world around you.
Practice is a key component of improving your luck. The harder you work, the luckier you get. The golfer, Jerry Barber coined that phrase and I think it’s true. There is no such thing as a shower moment for someone who is not an expert in their field. That’s not the kind of luck that exists to me.
If you spend ten years refining your skills, working hard and practicing it is possible that you will one day hit the jackpot while taking a shower. Only with dedicated work and consistent practice will you “stumble” on a solution to a problem that you’ve been contemplating for a year. This is the kind of luck you can control. You put yourself in a position, through hard work, where luck matters.
Timing is an entirely different kind of variable that can make or break your business and brain. Launch a year too early and you miss a trend. A year too late and the trend has missed you.
I’m a firm believer in “done” being better than “perfect” for this reason. You can capitalize on a trend with a product that is out in the market whether it is perfect or not. You can iterate and make the most of your luck and the timing available to you.
Tied into this is the ability to look up and recognize shifting macro trends in the world. While building Nic Harry (a sock company I used to own) we started aggressively opening physical stores while the world was experiencing what we now call the “retail apocalypse”. Stores and malls across the world were closing while I was opening a new store every 3 months. Insanity that could have been avoided if I had just taken a month to breathe, look up and research the world I was living in.
Cash flow vs Revenue vs Profit
Over the past decade, I have explained this simple concept to so many entrepreneurs that I feel like I should tattoo the phrase to my forehead:
“Cash flow vs revenue vs profit: Ask me about it!”
Believe it or not, your business can be bringing in massive revenues and go under the next month. If you are reading this and wondering how then you don’t understand what cash flow is.
The simple version: Money going out of your business (expenses) VS money coming into your business (revenue). If the expenses are due sooner than the revenue is coming into your account, you are screwed.
If your revenue is high, expenses are low and the money lands in your account often but leaves infrequently then you have time and cash flow to keep your business afloat. The flow of cash is an incredibly important and potent concept that most entrepreneurs just don’t grasp effectively.
Not enough businesses aim to be profitable consistently. This is the holy grail for a business owner if you haven’t realized it yet.
If you can build a business that consistently has more money coming in than going out you are profitable and sustainable. That’s the dream!
Hiring is more important than you think it is
We all talk about how important hiring is but when you are scaling a business you just need bums in seats doing work. Often you bend on your criteria when you’re in a rush and up bringing in a sub-par team member.
Take it from me; the bad eggs rot from the inside out and the rot spreads faster than you can manage it.
Hire slowly. Fire quickly.
When you are just starting to build your team, remember that you will become the five people you spend the most time with. Even darker, I believe that you will inherit the worst parts of the five people you spend the most time with. Make sure that their worst parts are better than the best of anyone else.
These first five hires will also very clearly define your company culture. Don’t underestimate how important this is.
One of the most important lessons I have learned around hiring and firing is that sometimes your best performing team members are assholes.
You have to fire the assholes immediately.
One person can destroy your culture far more detrimentally than the work they do or the money they bring in.
Remember: Hire slowly. Fire quickly.
It’s OK to walk away
When you start building something it’s usually because the business is important to you. You are trying to solve a real problem that matters in the world or your world at the very least. This emotional commitment to your idea or business is a silent happiness killer.
We marry our ideas but we forget that half of marriages end in divorce.
Don’t marry your business or idea. There are lots of businesses to be built and lots of ideas in your head. There is a lot of time for you to start something new.
If your business makes you unhappy, if you hate going to work every day, if you can’t get up in the morning, if you are unhealthy, fat, tired, drained, fearful, stressed out and suffer from panic attacks, do yourself a favor and consider walking the fuck away.
You may be embarrassed for a short time. You may feel depressed and sad but I can tell you now that you’ll get over it. You’re an entrepreneur and we are survivors, builders, thinkers, and opportunists. We make it through.
No one ever tells us it’s OK to walk away so I’m telling you right now; It’s OK to walk away and burn it all down if you have to.
Failing is integral to succeeding
I have never met a successful person who has never failed. The smartest people I know embrace failure, they seek it out and work towards it as a goal. They aren’t shy about making mistakes.
The moment I decided to talk openly about failure I realized that everyone I know wants to talk about it too. We’re all neck-deep in imposter syndrome trying to feel OK about ourselves and our failures.
The more frequently we engage in conversations about our failures, the more we’ll all learn from them and accept them as normal. If you hide your failure and try to protect yourself from it you never become battle-ready and resilient.
The more you fail, the better you get at recognizing when you’re on the cusp of failing. As soon as you see the signs you can pivot, bob and weave and try something new. If you spend your days trying to avoid failure then the impending failures will just get bigger and bigger until one of them crushes you.
Failure will eventually catch up with you and hurt your business. It’s just a part of building stuff. The first lightbulb wasn’t the one that we use today. The first social network didn’t live forever (and I doubt FACEBOOK will either).
Lots of little failures are manageable, aim for them, seek them out, recognize them and kick them in the ass!
Your network defines you
Relationships are really difficult to build and maintain. Most people have a core group of people and are set for life. This has been true for my immediate network of people that I rely on day to day but isn’t true of my broader network of people that I trust and that trust me.
I’m a 50/50 kind of guy. 50% of people really like and trust me and I have a feeling that 50% of the people I have met dislike me immensely and probably wouldn’t work with me if they had the choice.
I like these odds. I don’t live to placate the people around me. I don’t live to make everyone happy. But I do respect people even if I don’t like them and I hope that people who encounter me respect me because I tell it like it is.
Early on in my life, I realized how important making and retaining relationships would be. I may not be the best friend to everyone but I have always stood by my way of life and am consistently the same person with everyone.
If I don’t like you, you know it. If I respect you, you know it. If you do something I don’t appreciate, we’ll have a conversation about it. This is how I maintain my network; I’m honest and I am who I am.
I take very seriously who I choose to spend time with. Time is literally the only asset that we cannot make more of so I am extremely careful with who I spend my time with. This is why I curate my network so carefully.
I like to give people the benefit of the doubt and engage with them to figure out if we can help one another. But I don’t abuse my network of friends and colleagues. I nurture it, I add value, I provide an ear when they want to talk and connect people that I think can and will do amazing things together.
As my network has grown I receive requests for introductions. I once read about a double-opt-in introduction rule; you can only introduce people if both parties agree to the introduction. This is now my default rule. There is nothing worse than forcing a friend who trusts you to engage in a useless connection that you haven’t vetted properly and isn’t beneficial to both parties. Give the parties the ability to say no without any awkwardness.
Growing and maintaining a wider and more important network of people is a difficult task and requires dedicated attention. Don’t neglect it and then expect help one day. You have to nurture and grow with and for the people around you. Add value and then ask for help when you need it.
Sleep can make or break you
The older I get the more I want to ensure my sleeping routine is right for me. Early in my entrepreneurial journey, I worked through sleep cycles and ignored the damage that sleep deficit was doing to me.
Staying awake until 3am and coding, writing a business plan, hustling, grinding and pushing through the wall of doubt is destructive and frankly very naive.
If you are dumb enough to think that you are special and can survive on 3 or 4 hours of sleep then that’s your choice. I am not that person. I like to wake up fresh and well-rested.
You’ll probably ignore me on this one but remember reading these words in ten years when you’re exhausted and realize that you actually do need 8 hours of sleep.
If you are interested in figuring out how much sleep your body needs to survive then try this:
Go to sleep relatively early for a week, around 9pm and don’t set an alarm. Make a note of the time you wake up naturally. Do this for 7 days and you will figure out your body's natural requirement for sleep. My minimum is 7 hours and max is 9. If I sleep for more than 9 hours I am a mess.
Here are some simple tricks I’ve learned to help me with my sleep:
Meditate in the morning or the evening. It teaches you to calm your mind.
Don’t look at your phone before you go to bed.
Don’t watch TV in bed (duh).
Try to watch less TV overall.
Exercise.
Don’t check your email (duh).
Turn off all notifications 30 mins before bedtime.
If you can’t sleep because your mind is racing: Count your breaths to ten and then start over until you fall asleep (there are lots of this kind of trick).
Mental health matters
I spent my early twenties ignoring my mental health.
I ignored the physical manifestations of my severe mental tension, stress, anxiety, panic, imposter syndrome and fear.
I ignored it when it gave me a stomach ulcer. I ignored it when it ruined my relationships. I ignored it when it sank my businesses. I ignored it because the world told me that men don’t have mental health issues, they are strong and it’s not manly to admit you need some help and mental coaching. I ignored my mental health until my mind broke.
Eventually, I saw a psychologist and took my mental health seriously and I have never looked back.
Now I meditate multiple times a week and whenever I can, I talk to people about how I’m doing and how they are doing. I talk openly about mental health being as important as physical health.
Learn from my pain; take your mental health seriously and if you feel like anxiety and stress are overwhelming you then talk to someone.
None of it means as much as you think it does
You think that your social media widget thingy is the most important thing in the world when you’re building it. The truth is, none of it really matters that much. Yes, it’s good to be passionate about what you do and yes your business is important to you at the time you’re building it, but it’s likely going to fail and you’re likely not going to die when it does.
If it literally isn’t going to kill you, it isn’t the most important thing.
You think that you need to answer that email at 10pm. You don’t.
You think that you need to wake up and get straight to work without exercise or meditation. You don’t.
You think that if you don’t make this business work your life will be over. It won't.
Your business is going to fail, trust me. It’s going to happen.
You know what happens tomorrow if your business fails today? Not a whole lot. You may have debt and that sucks, but you can work your way out of it. You may have some pissed off staff or suppliers, but they’ll get over it.
Something only matters as much as you give it relevance and weight.
You can choose a different reaction. You can choose a different feeling. You can integrate your work with your life and vice versa. It’s not a zero-sum game.
The biggest lesson that I’ve learned as a startup founder and entrepreneur is this: